California Bill Would Loosen Restrictions On The Use Of Digital Currency

Authored by Kimberley Hayek via The Epoch Times,

A California bill that would allow all businesses and individuals in the state to accept digital asset payments, such as cryptocurrency, and prohibit government restrictions on the use of digital currency, is being considered by a legislative committee.

Introduced by Assemblyman Avelino Valencia earlier this year, Assembly Bill 1052 was recently reviewed by the state Assembly’s Banking and Finance Committee before it was amended and re-referred back to the committee on April 1 for further scrutiny.

If passed, the bill would authorize an individual or business in California to accept digital financial assets such as Bitcoin for the sale of goods or services. It would also deem the use of a digital financial asset as a valid and legal form of payment in a private transaction.

Currently, California law will prohibit a person from engaging in digital financial asset business activity starting on July 1, 2026, unless the person is licensed by the Department of Financial Protection and Innovation or is exempt from that licensure requirement.

In contrast, the new bill would prohibit public entities from banning, restricting, or imposing any requirements on the use of such digital currency. They would also not be able to impose a tax, withholding, assessment, or other charge on a digital financial asset solely based on the asset being used as a payment method.

“This section does not prohibit a public entity from imposing a tax, withholding, assessment, or other charge that would otherwise be imposed if the transaction had taken place with legal tender other than a digital financial asset,” according to the bill text.

AB 1052 also expands the scope of the Political Reform Act of 1974, which prohibits public officials from using their official position to make, participate in making, or influence a governmental decision in which the official holds a financial interest.

The new bill would prohibit a public official from issuing, sponsoring, or promoting a digital asset, security, or commodity.

“A public official shall not engage in any transaction or conduct related to a digital asset that creates a conflict of interest with their public duties,” AB 1052 states.

Digital assets in California are primarily regulated under the Digital Financial Assets Law, which consists of two separate pieces of legislation that established a framework for the licensing and regulation of digital assets.

Gov. Gavin Newsom signed both bills into law in October 2023, and they were scheduled to go into effect on July 1, 2025. However, another bill passed last year delayed that date until July 1, 2026.

In January, California Assemblyman Phillip Chen introduced another bill, Assembly Bill 236, that would prohibit the cost of licensing fees under the Digital Financial Assets Law from exceeding $5,000.